Oil Prices Rise as Hormuz Talks Continue Amid Ongoing Supply Disruptions

Oil prices rose on Tuesday as investors weighed diplomatic efforts to reopen the Strait of Hormuz against continued disruptions to global energy supplies from the Middle East and Russia.

The Brent crude futures price gained 1.05% to $88.64 a barrel, while US West Texas Intermediate crude rose 1.25% to $83.16.

The market has been closely watching diplomatic efforts after Qatar's foreign ministry said discussions between Oman and Iran over shipping routes through the strategic waterway had reached an advanced stage.

However, shipping activity through the Strait of Hormuz remains significantly below pre-conflict levels, with only six vessels transiting the strait on Monday compared to a 10-day average of around 11 vessels.

Fawad Razaqzada, analyst at City Index and FOREX.com, said 'any signs of de-escalation or any signs of a deal are good news for risk assets and bad for oil, obviously. But it's all talk at the moment. It's all headlines. There's no meaningful progress.'

Supply concerns also extended beyond the Middle East, with Libya warning that it could declare force majeure if drone attacks on energy infrastructure continued in the strategic city of Zawiya.